Employing his typical folksy humor and optimism, Buffett's letter discussed such themes as income inequality, climate change, efficiency and prosperity, as well as investments like BNSF Railway and Kraft Heinz.

"For 240 years, it's been a terrible mistake to bet against America, and now is no time to start," he wrote.

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Engine of growth

Berkshire Hathaway reported a 32 percent jump in fourth-quarter earnings on Saturday, as its eclectic collection of subsidiaries mostly performed well.

The conglomerate based in Omaha, Neb., that Warren Buffett leads earned $5.48 billion, or $3,333 per Class A share. That's up from $4.16 billion, or $2,529 per Class A share, a year earlier. Berkshire's insurance companies, which include Geico and General Reinsurance, recorded a $306 million underwriting profit, up from $191 million. The company's BNSF railroad and utility businesses also performed well.

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"America's golden goose of commerce and innovation will continue to lay more and larger eggs."

Buffett cautioned, though, that while the "pie to be shared by the next generation will be far larger than today's," the way it is divided will "remain fiercely contentious." Many of the negative effects of innovation and greater efficiency tend to harm the worker, he said.

In his letter, Buffett contrasted Berkshire's pursuit of efficiency with that of 3G Capital, the Brazilian investment firm that he partnered with to acquire Heinz, which was later combined with Kraft last year.

While praising 3G's method as "extraordinarily successful," Buffett said it encompassed buying companies with the intent to immediately cut costs.

Berkshire, he said, also "craves efficiency," but looks for companies that are avoiding bloat, ones that are already run by efficient managers.

His example was Precision Castparts Corp., which was purchased a month ago for $32 billion - the company's largest acquisition to date.

Much smaller acquisitions were also a focus last year, when Berkshire's subsidiaries made 29 "bolt-on" acquisitions, costing $634 million. Buffett said that the company would make dozens more such acquisitions in future years.

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